Our View: No one would dare to rein in well-paid bank workers

Bank employees who left their jobs on the ultra-generous voluntary exit schemes have been complaining because the labour ministry has put their applications to collect unemployment benefit for six months on hold. There is a legal problem and Labour Minister Kyriakos Koushos has asked the attorney-general for advice.

In the past, bank employees could claim unemployment benefit as soon as they took early retirement, as this was a legal grey area, something that suited their union, Etyk, which knew no politician would dare address it. Collecting unemployment benefit from the state was the accepted practice and nobody had the desire to rationalise the rules because this would upset Etyk and the unions at semi-governmental organisations, which also offered obscene compensation packages for early retirement.

A recent court ruling has meant that the legal grey area is no longer so grey. An employee of a private company, who took an early retirement package and was denied unemployment benefit, took the government to court which ruled that the labour ministry’s decision was correct. The employee had been adequately compensated, as the amount paid covered more than six months of salaries, ruled the court. In other words, the private company had paid the unemployment benefit of the complainant.

In light of this decision, the labour ministry could not sanction unemployment benefits for the Bank of Cyprus employees who were paid the equivalent of about two years of salaries to take early retirement. The six months of unemployment benefit they were entitled to was more than adequately covered by the compensation package. And the compensation, which in some cases was as high as €200,000, is tax-free. Paying these employees six months of unemployment benefit as well, made no sense at all, but because the law was unclear, it was exploited for the benefit of the employees.

We doubt, less than two months before presidential elections, there is any chance this plundering of state funds by our highest-paid workers will be stopped. The attorney-general will most probably come under pressure from Etyk and the political parties that are in thrall to it to find some way for the entitled bank employees to collect unemployment pay. There is no way anyone would oppose this.

Once the over-compensated bank employees collect their unemployment pay, the law needs to be tightened and it should be based on the ruling of the courts. When the compensation of workers taking early retirement amounts to more than six months’ pay, they should not be entitled to unemployment pay. It is a straightforward solution that would end another lawful method of workers in the top earners’ group plundering the state.